the enlightenment of strategy vs. the enlightenment of the Absolute

In 1822, Stendhal’s master, Destutt de Tracy, published Condorcet’s notes on the 29th book of Montesquieu’s Spirit of the Laws. Condorcet’s objections to Montesquieu voice the protest emitted by the revolutionaries at the end of the Enlightenment period against the first Enlightenment generation. Within intellectual history, the French revolution was mounted not simply against what the revolutionaries called ‘feudalism’, but also against the first Enlightenment generation, those who were celebrated, later, in Michelet’s history of the Regency. The revolutionary generation was already thinking in terms of the universalism for which the codex was The Phenomenology of the Spirit. The force of Condorcet’s objections are summed up in the comment on Chapter IV, The laws which shock the views of the legislator: “How is it that in The Spirit of the Laws Montesquieu never speaks of the justice or injustice of the laws that he cites, but only of the motives that he attributes to these laws? Whiy doesn’t he establish any principle for distinguishing, among the laws emitted by a legitimate power, those which are unjust and those which are in conformity to justice? Why, in the spirit of the laws, is there never any question of the nature of the right to property, of its consequences, its extension, its limits?” (281 – my translation)

What Condorcet is complaining about is what I would call the Enlightenment of strategy – for the relativism of the Enlightenment thinkers (Condorcet goes on to blast the conclusions Montesquieu draws from the history of a ‘few Greek villages”) is a strategist’s relativism. In one sense, one can draw a line (unexpectedly enough) from Montesquieu to Foucault, and gather the same type of criticism of the latter as the former – where are the absolutes? Where are the universals?

Where does this strategic thought come from? In Montesquieu’s case, one wants to say, obviously Machiavelli. But I have an idea that, more broadly, the analysis of law as strategy is connected to the Leibnizian idea of the best of all possible worlds.

The image in the Theodicee is striking. In a letter to Sophie Volland in which Diderot describes an evening he spent with Grimm and the Abbe Galiani (the repartee of which he describes in the letter – “dear friend, I think that our babbling besides the fireplace is something that always amuses you, and so I followed it”), the three began to speak of original sin and whether man merits the pain he suffers in the world.

“On these occasions, what is the party of good sense? This, my friend, which we took. Whatever the optimists say, if the world could not exist without sensible beings, nor the sensible beings without pain, it had only to remain at rest. It could have gone on an eternity without committing that stupidity.

The world, a stupidity? Oh, my friend, a beautiful stupidity nonetheless! It is, according to the inhabitants of Malabar, one of the seventy four comedies that the Eternal amuses itself with.

Leibniz, the founder of optimism, also as great as a poet as he was deep as a philosopher, recounts somewhere that there was in a temple in Memphis a high pyramid made of globes stacked one on the other; and that a preacher, questioned by a traveler about this pyramid and the globes, responded that this was all the worlds possible, and that the most perfect was at the summit. And that the traveler, curious to see up close the most perfect of worlds, mounted to the height of the pyramid, and that the first thing that struck his eyes, glued to the top globe, was Tarquin raping Lucretia.” (my translation, 271)

In the perfect world of the strategic Enlightenment, there was, cosmically, no Pareto optimum outcome. Perfection was entirely a principle of construction. The wedding of optimism and horror – repulsive to the romantics – was, for the Enlightenment strategists, the principle that Condorcet failed to see in Montesquieu – with the latter’s penchant for anthropological anecdotes.

on the image of revolution

In the introduction to the history of the Regent’s reign that forms the 14th volume of his History of France, Michelet writes:

“The regency is a whole century in eight years. It lead to three things at once: a revelation, a revolution, a creation.
I. It is the sudden revelation of a world arranged and masked for fifty years. The death of the King [Louis XIV] is a coup de théâtre. What was underneath becomes what is on top. The roofs are lifted up, and one sees everything. There never was a society so open to the light of day. A rare good fortune for the curious observer of human nature.
II. And it is not only the light that returns; it is movement. The regency is an economic and social revolution, the greatest that we had before 1789.
III. It seems to have aborted, and not less did it remain enormously fecund. The regency is the creation of a thousand things (the great roads, the circulation from province to province, free education, the bank account, etc.). The charming arts were born, all those which make for the easiness and agreement of private life. But, this was even more great, a new spirit began, against the barbarous spirit, the bigoted inquisition of the preceeding reign, a large spirit, soft and humane.”

The trope of the ‘roofs being lifted up’ is used in another, individualistic sense by Emerson in his essay, Experience:

“Every roof is agreeable to the eye, until it is lifted; then we find tragedy and moaning women, and hard-eyed husbands, and deluges of lethe, and the men ask, `What's the news?' as if the old were so bad. How many individuals can we count in society? how many actions? how many opinions? So much of our time is preparation, so much is routine, and so much retrospect, that the pith of each man's genius contracts itself to a very few hours.”

There is something sensational – revolutionary, apocalyptic – that is crystallized in the image of the roof being lifted off the house. It is a disaster, a blind strike by nature that crushes all human intentionality - and yet it has the exhilarating scope of an escape, of the dissolution of the congealed, dead labor of intention that bears down on the living like a nightmare. Louis XIV’s masked world of bigotry and Emerson’s reference to the world of narrowed experience that results from the routine irresistibly enforced by respectability and endless labor, under the system of moneymaking – both are eminently roofed worlds. The mask complements the roof to the extent that both disguise the naked human, face or body. Both conceal secrets. But the roof, unlike the mask, thrusts us back to the forest floor from whence we came, the treetop canopies that sheltered our monkeyness, and in this it seems the most useful of things. The mask is made to be removable – the roof, not.

When both are removed, we see the misery of the world. The deluges of lethe, the slow, grinding torture of the court.

Still, for all the exhilaration when the roof is lifted off, when man becomes earthquake to man, we realize that we can’t live in that moment. We must have roofs. The revolution cannot be permanent. The problem for the revolutionary imagination is that if the revolution finds a stop – if an equilibrium is established around which a new order assembles – if the roofs are generally nailed on again – we necessarily re-establish the conditions that lead, at the very least, to deluge of lethe, to the class system of claustrophobia.

But something changes.

In Michelet’s preface, the change that is brought about by the temporary rooflessness is that France, for the first time, consciously joins the global system. Michelet, like many French historians, conflates France and Europe, ignoring, for instance, the Spanish and Portugese experience. Yet he does point to a social fact – the new sense of the global order that we see in the first wave of the enlightenment. This social fact is, as well, a new sense of the domestic order. The economic experiments of the Regency also penetrate the household of the peasant, Michelet claims.

In a wonderful passage about the ruin of Law’s system, he writes:

“In this misfortune, yet note one thing: the old bankruptcies, the violent reduction of Mazarin or Colbert or Desmarets’ rents was without any consolation, a dead and sterile series of facts. But Law’s catastrophe was of a wholly other type of import. It had the singular effects of a sudden illumination. France knew itself.
Massew who had been immobile and ignorant up to this point, like the bottom of the Ocean, having never known tempests, the class that was not moved by either the Fronde or the Revocation, lifted up their heads this time, inquiring about the public treasure – and thus of the state and the kingdom, of war, of peace, of neighboring kingdoms, of Europe.
The distant enterprises of Law, his colonializations, the razzias that were made for the Mississippi, obliged the coldest among them to dream of the other hemisphere, of unknown lands, as one said, of the isles. In the cafes which opened by the thousands, the talk was only of the Two Indies. The seventeenth century saw Versaille. The eighteenth saw the Earth.”

Michelet is writing after Marx and Engels Communist Manifesto, and he might even have known that paen to the world economy.

This is, of course, the other side of the melancholy of the clerks. Do not think that the ichor in the veins of homo economicus is absolutely cursed – he, too, is a dialectical figure.

Marx and the two removes

Last year, I did a rather hasty reading of the chapter on circulation work in Capital, Chapter six. In thinking about homo economicus, I’ve returned to chapters five through seven and thought more seriously about Marx’s analysis – his counter-magic - here. For Marx, in writing these chapters, is taking aim at an idea that took root in Mill and has now blossomed, abundantly, in every apology for the insane incomes of CEOs that one finds strewn across the pages of the mainstream economists today. Marx, in one of those dense/light passages in which he specialized (in which the heavy machinery of his concepts seems, at the same time, to be making the moves like Fred Astaire showboating), wrote, in Chapter 5:

The circulation time [Umlaufszeit – orbital time] of Capital thus puts limits overall on its production time, and thus its valorization process. And actually it puts these limits on the latter in relation to its own duration. [-R:that is, the duration of circulation time] This can vary a lot, either increasing or decreasing, and thus limit in very different degrees the production time of capital. But what the political economy sees is that which appears, namely the effect of the circulation time on the valorization process of capital in general. It grasps this negative affect as positive, because its consequences are positive. It insists even more on this semblence as it seems to deliver the proof that capital possess a independent mystical source of self-valorization apart from the exploitation of labor, that flows to it out of the circulation process. We will later see how even the scientific economists can be deluded by this semblence. It is, as will be shown, strengthened through various phenomena: a. the capitalistic mode of calculating profits, wherein the negative ground figures as positive, since for capitals in different spheres of investment, where the circulation time only functions differently, as longer circulation times serve as the ground of the elevation of prices, in short, as one of the grounds for the equalization of profits; 2. the circulation time constitutes only one moment in the circulation time, as the lateer includes the production time or reproduction time. What is due to the latter, seems due to the circulation time. 3. The conversion of commodities into variable capital (workers wages) is conditioned through its previous metamorphosis into money. By capital accumulation the conversion into additional variable capital occurs in the circulation sphere, or during the circulation time. The accumulation thus resulting seems to be owing to the latter.”

My translation, I should say.

As always, in Marx, the moment of demystification is the moment in which the images in the camera obscura of ideology are reversed – this is Marx’s deep connection to Michelet’s witch, who reverses the sacred verses in order to find the material truth about society.

Marx’s distinction between the two spheres starts an analytic process by which a new definition of value, or a new way of seeing value, is slyly introduced. In Chapter 6, as we will see, there is a fleeting reference to the difference between value for – or from the perspective of – society and value for the capitalist. The circulation worker, as Marx will make clear, is formally exploited like the production worker – her time is exploited – but not in terms of the surplus value she produces. She produces an instrumental value in terms of the sphere of circulation, but – as circulation produces no value – she cannot produce surplus value.

I will go more into that in another post. But let me hastily draw some large conclusions. I think we can find, here, the basis for a model of modernization that moves forward in “two removes” – the remove from nature and the remove from production. When Peter Drucker, in the sixties, began to popularize the idea that capitalist economy had entered a new phase with the domination of the ‘knowledge worker’, there was a core of truth in his idea, even if it was the realization of conditions that had long been the case: in modernization, the sphere of production is not only the sphere in which value is produced, but it is also marked down for shrinkage – like agriculture – as it becomes occluded by the sphere of circulation. The importance of clerk literature – Gogol’s discovery of the banal – comes about as the sociological and existential consequence of the fact that the supposed duality between culture and nature is really a threefold matter, which the circulation worker feels in his or her bones – not only does ‘culture’ block nature, but so does production. The sense that the movement of paper – or bytes – is removed from value sinks, of course, to the bottom of the collective consciousness – it is a much repressed truth – and yet it continually returns. It is in these sociological and existential conditions that homo economicus is introjected into the developed economies, and, in as much as they represent the iron and inalterable path in which all parts of the world market are moving, the destiny for the populations of all developed countries, who are not only on the treadmill of production, but that of circulation as well.

the interstices

In a letter to a friend that serves as the preface to Francois Laye’s French translation of Book of Disquiet, Pessoa writes that “life bothers me almost noiselessly, in little sips, by the interstices.”

Pessoa’s heteronym, Bernardo Soares, whose reflexions constitute the Book of Disquiet, is, like Pessoa, a clerk and a poet. I’ve already broached the juxtaposition of commerce and poetry in my previous post. The literature of the clerk is created in the interstices of the system of world trade. The Daoist element in modernism consists in looking, with a poet’s consciousness, upon the clerk’s routine.

‘I know very well that the day when I am named the chief accountant of the firm Vasques and Company will be one of the great days of my existence. I know it with a bitter and ironic anticipation, but also with that intellectual advantage of a certitude.”

In contrast to this note of the deepest resignation – the resignation of Kierkegaard’s Knight of Faith, whose life is consciously devoted to an all embracing lack of faith – there is the note entitled Absurd Axioms, which begins:

To become the sphinx, even the fake sphinx, to the point of no longer knowing who we are. For, in fact, we are nothing other than the fake sphinx, and we really are ignorant of who we are. The only way to find ourselves in accord with life is to be in disaccord with ourselves. Absurdity is the divine.

To found theories by a patient and honest reflection for the sole purpose of combating them afterwards - to act and justify our actions by theories which condemn them – to trace a path in our lives for acting, consequently, in the inverse direction of the path. To effectuate all the acts, to assume all the attitudes of something that we are not, that we do not claim to be, and that we, further, don’t wish others to imagine that we are.”

This is the credo of the circulation worker on the brink of the alienation that defines his place in the system. I am indifferent to whether the circulation worker is working in the post office for the government or the marketing department for a software manufacturer. These axioms are taken from one form of the real, which was discovered by Gogol (in the sense that Columbus discovered America – Gogol simply bumped into the already-there) as the eternal banal.

Literary reflexions that I want to put in relation with another genre of discourse – that of economic rationality.

I have misused the notion of the exchange matrix as proposed by Robert Clower in a famous 1967 paper about the efficiency of money as a mediator of exchange. There is an excellent discussion of this in Philip Mirowski’s The Reconstruction of economic theory. Clower’s images still adhere to the grand principle of neo-classical economics, which is that it is prices all the way down – the seismograph takes over the earthquake machine, and we assume equilibrium where there is none because otherwise, we don’t have a theory. The assumption of neo-classical economics cleans the ‘price’ of its dialectical character – not accidentally. Instead, all are given ‘endowments’ exogenously, and enter into the system – there is no room here for Pessoa’s realization that his life is caught in the interstices.

Still, the form of the exchange matrix is excellent. I view it as a kind of spread sheet – indeed, it is a spread sheet. It is one we all carry with us. The values by which we calculate change according to the frame we are operating in. And here, borrowing from Bataille, I would say that the economist’s view of rationality is really ‘limited’ rationality – the rationality that applies to a certain common form of the spread sheet, which applies to one level of social practices, in which the capitalist element is strongest. However, limited rationality does not define all rationality. The mistake economists make when, in dismay, they confront the discoveries of behavior psychologists - that, for instance, preferences aren’t transitive or invariant, and that rational choice makes a highly select use of real individual behavior – is to think they are witnessing ‘irrationality’. What they are witnessing is the rationality that comes with changing the options of the spread sheet – for instance, the preference tool. This is possible because the spead sheet consists of affordances. Rationality is defined in terms of the options that are checked – and in this sense, that is, in the sense that there are an indeterminate number of matrixes of exchange, we are dealing with ‘general rationality.’

I prefer not to

I was talking with A. last night about what I call clerk literature – or wastepaper basket literature. I hope she likes this post.

There is a lineage that goes from Lichtenberg’s Scribble book through Lamb, Baudelaire’s Fusées, Rozanov, Pessoa, and – supremely – Kafka, whose request to Brod to burn his papers was, as it were, a request from this history itself, over and above Kafka’s personality. The principle holding this literature together was enunciated by Bartleby – I prefer not to. This is, in the universe of the clerk, equivalent to Lucifer’s non serviam – it ties together the two elements of the scribble and the institution. If we can speak of an institutional consciousness, it is always a consciousness of the system. Jack Goody, in The Domestication of the Savage Mind, notices the importance of the list in all early writing that has been found in the Mesopotamia. Goody divides lists into three types: the list that is a catalogue of names, events and offices, which he calls a ‘retrospective’ list, and which can be thought of as a representation of work-flow; the ‘shopping’ list, or the list that includes expectations and items for future projects; and the lexical list – the proto-dictionary, the list that lists the elements of listing – sounds, letters, numbers. A very important list, according to Goody, in Mesopotamia. All three of these lists are dealt with and syncretized in the clerk’s office – viewing the clerk very broadly as one of the central types of ‘circulation’ worker, as Marx named them. The accountant’s task, for instance, is – for all of its spreadsheet cleverness – directly related to the functions invented in the Mesopotamian bureaucracies.

The clerk’s literature is a form of Western Dao – Bartleby’s phrase operates in this invisible tradition much as certain phrases from the Chuang Tzu operate to bind together the concept of the Dao. “Therefore a man who has wisdom enough to fill one office effectively, good conduct enough to impress one community, virtue enough to please one ruler, or talent enough to be called into service in one state, has the same kind of self-pride as these little creatures [the cicada and the quail who mock the giant flights of monster birds, etc.] Sung Jung-tzu would certainly burst out laughing at such a man. The whole world could praise Sung Jung-tzu and it wouldn’t make him exert himself; the whole would could condemn him and it wouldn’t make him mope.”

Sung Jung-tzu’s laughter, to be sure, is different from Bartleby’s inexpressiveness. But in the line of texts that extend from Lichtenberg to Kafka (and into the pit of which, I think, literature in the age of its de-institutionalization is being inexorably lead), there is a laughter that comes out when, for instance, Kafka read his stories out to his friends. Or in a letter to Felice, when Kafka told his fiancé that he was famous in his office for his laughter [Ich bin sogar als grosser Lacher bekannt] and gave the example of his inability to stop laughing when, one day, the president of the Insurance company made a speech bemoaning the accidents of workers and the trouble this causes for insurance companies. In fact, Kafka coulndn’t help laughing, nor could he even look away and disguise his face when the President made his speech.

Therefore (the phang ascended to) the height of 90,000 lî, and there was such a mass of wind beneath it; thenceforth the accumulation of wind was sufficient. As it seemed to bear the blue sky on its back, and there was nothing to obstruct or arrest its course, it could pursue its way to the South.
A cicada and a little dove laughed at it, saying, 'We make an effort and fly towards an elm or sapanwood tree; and sometimes before we reach it, we can do no more but drop to the ground. Of what use is it for this (creature) to rise 90,000 lî, and make for the South?'

Perspectivism, rational choice theory, and Blake

Lately, LI has been thinking about how to put together two theses in the Homo Economicus book. One thesis is that there is a multiplicity of matrixes of exchange even within modernity – and that the seeming hegemony of the money matrix, to the extent that it even defines the economic as opposed to the non-economic, is a phenomena that has certainly penetrated other matrixes – such as the complex gift and barter relationships of family, friendship and alliance – without fundamentally ‘commoditizing’ them. In one sense, my whole thesis is that there is a dialectic structure that governs the degree to which the hegemony of money, as reflected in the character of homo economicus, can actually dispense with other matrixes, since its survival is threatened by its monopoly of all spaces of exchange.

The other thesis is that rationality, as the economists define it, is linked to a realism that denies perspectives as anything other than representatives of ‘parts of reality’. Myself, I am a perspectivist of the ‘hard; variety – that is, I see no reason to put up with the idea that the parts of reality make up one reality. Reality, here, becomes a substitute for the God’s eye perspective – that point at which we can see the whole universe. Perspectivism denies that perspective can be constructed. It does not deny, it should be said, that certain processes might be shared among perspectives – say, a process for correlating statement and fact. Or even a process for ordering preferences. It simply denies that this formal characteristic has any substance. In other words, rationality within a perspective refers to the norms of the perspective, not to processes that transcend perspectives. Hard perspectivism contends that there is information in a given perspective – something that can be defined by simple axioms – that does not exist in other perspectives. In the clash of perspectives – which is the dynamic by which perspectives are made – this information can be completely lost – the way a passenger pigeon saw an oak tree no longer exists, for instance. I would not go so far as to say that different matrixes of exchange form completely different perspectives, but something similar might well hold – that is, that there is information in a barter exchange that can’t be transformed or translated into the money exchange. Etc.

In other words, I want to build a theory about economics based on this phrase of Blake’s:
How do you know but ev'ry Bird that cuts the airy way,
Is an immense world of delight, clos'd by your senses five?


Now, onto some reading notes.

“A body of data and theory has been developing within psychology which should be of
interest to economists. Taken at face value the data are simply inconsistent with preference
theory and have broad implications about research priorities within economics. The
inconsistency is deeper than the mere lack of transitivity or even stochastic transitivity. It
suggests that no optimization principles of any sort lie behind even the simplest of human
choices and that the uniformities in human choice behavior which lie behind market
behavior may result from principles which are of a completely different sort from those
generally accepted. This paper reports the results of a series of experiments designed to
discredit the psychologists' works as applied to economics.” – Grether, Plott

So begins a rather puzzling paper on the phenomenon of ‘preference reversal’, “Economic Theory of Choice and the Preference Reversal Phenomenon” (1979). It is puzzling because, as has been pointed out by Daniel Hausman, the two economists who introduce, in sweeping terms, an examination of a series of experiments that seemingly contradict the central tenant of the neo-classical theory of choice end the paper by retreating almost totally from their introduction:

“The fact that preference theory and related theories of optimization are subject to exception
does not mean that they should be discarded. No alternative theory currently available appears to be capable of covering the same extremely broad range of phenomena. In a sense the exception is an important discovery, as it stands as an answer to those who would charge that preference theory is
circular and/or without empirical content. It also stands as a challenge to theorists who
may attempt to modify the theory to account for this exception without simultaneously
making the theory vacuous.”

As Hausman puts it, “It is almost as if they conclude, “Since these awful data cannot be discredited, economists should ignore them, although not without first congratulating themselves for possessing such a splendidly non-vacuous theory.” (207)

Plott and Grether’s paper concerns an experiment in betting.

“Individuals under suitable laboratory conditions are asked if they prefer lottery A to lottery B as shown in Figure 1. In lottery A a random dart is thrown
to the interior of the circle. If it hits the line, the subject is paid $0 and if it hits anywhere
else, the subject is paid $4. Notice that there is a very high probability of winning so this
lottery is called the P bet, standing for probability bet. If lottery B is chosen, a random
dart is thrown to the interior of the circle and the subject receives either $16 or $0 depending upon where the dart hits. Lottery B is called the $ bet since there is a very high maximum reward. After indicating a preference between the two lotteries, subjects are asked to place a monetary value on each of the lotteries.”

Now, according to standard theory, if Lottery A is preferred to Lottery B, then Lottery A should receive a higher monetary value than Lottery B. That is, revealed preference should be coordinate with true preference.

What happened was quite different. The majority of respondents preferred the lottery with the lower risk and lower payoff, but put a higher price on the lottery with the higher risk and the higher payoff.

Lott and Grether’s paper builds on an early paper by two psychologists, Lichtenstein and Slovic (1971), who have continued to work on the psychology of preference to build, with Tversky and Kahnmann, prospect theory. Lott and Grether varied elements from the earlier experiment – for instance, the set of subjects was selected from the economics rather than the psychology department – but the results were consistent with the kind of preference ‘reversal’ revealed by the psychologists.

“Needless to say the results we obtained were not those expected when we initiated this
study. Our design controlled for all the economic-theoretic explanations of the phenomenon
which we could find. The preference reversal phenomenon which is inconsistent with the traditional statement of preference theory remains. It is rather curious that this inconsistency between the theory and certain human choices should be discovered at a time when the theory is being successfully extended to explain choices of nonhumans.”

Since these papers were published, a lot of experimental work has been done on the way people form preferences, and most of it is incongruous with the way that economists say that people form preferences. It is found that people’s preferences can vary widely over time; that the independence condition – seemingly irrelevant circumstances that are added to binary choices – can change the choices; that the order of preferences can be intransitive, so that we can’t even predict, from a choice, what the optimal preference is – and so on.

The decline of confidence in the foundational axioms of rational choice theory and its descendents has led to the current interest in behavioral economics and prospect theory. I’d like to put this work in relation to a fascinating paper by Avrin Offer on the survival of the Gift Economy in modernity: “Between the Gift and the Market: The Economy of Regard”.

TBC

the liberal myth of the economy as a board game

“Only through the forgetting of this primitive metaphor-world, only through the hardening and rigidifying of the primitive capacities of human fantasy that flowed out originally in a hot stream of images, only through the unbeatable belief, this sun, this window, this table is a truth in itself, in brief only through the fact that man forgets himself as a subject and really as an artfully creative subject, does he live with some rest, certainty and consequence. If he for one moment could escape out of the prison walls of this belief, immediately his self consciousness would be over and done with. Already it costs him some effort to admit to himself that the insect or the bird perceives a whole other world than humans, and that the question, which of both world perceptions is more correct is a completely senseless one, since here we have to measure with the standard of the correct perception, that is, a standard that is not at hand.”

(Nur durch das Vergessen jener primitiven Metapherwelt, nur durch das Hart- und Starr-Werden einer ursprünglichen in hitziger Flüssigkeit aus dem Urvermögen menschlicher Phantasie hervorströmenden Bildermasse, nur durch den unbesiegbaren Glauben, diese Sonne, dieses Fenster, dieser Tisch sei eine Wahrheit an sich, kurz nur dadurch, dass der Mensch sich als Subjekt und zwar als künstlerisch schaffendes Subjekt vergisst, lebt er mit einiger Ruhe, Sicherheit und Consequenz; wenn er einen Augenblick nur aus den Gefängnisswänden dieses Glaubens heraus könnte, so wäre es sofort mit seinem "Selbstbewusstsein" vorbei. Schon dies kostet ihm Mühe, sich einzugestehen, wie das Insekt oder der Vogel eine ganz andere Welt percipiren als der Mensch, und dass die Frage, welche von beiden Weltperceptionen richtiger ist, eine ganz sinnlose ist, da hierzu bereits mit dem Maassstabe der richtigen Perception d. h. mit einem nicht vorhandenen Maassstabe gemessen werden müsste. – Nietzsche.)

The metaphor-world of economics is never more entangled in its antinomies – like a crippled spider in its own web – than when it comes up against the odd question of the distribution of wealth. The neo-classic mainstream exists, in fact, in a world that it only recognizes as an irritant on the way to the utopian moment when the market absorbs all its children in a heavenly rapture – but if it were entirely blind to the fact that the state, that enemy of the good honest corporation and firm, plays a major role in economics, it would face the danger of being merely comic. The liberal solution to the endless differing of market heaven is that the state exists to create a “level playing field”. Mark Thoma, who runs the excellent blog, Economist’s View, just published an article on income inequality that contains a canonical version of this notion:

“I’ve never favored redistributive policies, except to correct distortions in the distribution of income resulting from market failure, political power, bequests and other impediments to fair competition and equal opportunity. I’ve always believed that the best approach is to level the playing field so that everyone has an equal chance. If we can do that – an ideal we are far from presently – then we should accept the outcome as fair. Furthermore, under this approach, people are rewarded according to their contributions, and economic growth is likely to be highest.
But increasingly I am of the view that even if we could level the domestic playing field, it still won’t solve our wage stagnation and inequality problems. Redistribution of income appears to be the only answer.”

I wrote a little response to this paragraph on Mark’s site.

“I've never understood the popularity of this belief in America. It seems a contradiction in terms. How can you "level" the playing field, and at the same time allow any unequal outcome? These are in direct contradiction with one another. Any 'playing field' in which one of the players gains a significant advantage will be vulnerable to that player using some part of his power or wealth to 'unlevel' the playing field to his advantage. There is no rule of any type, there is no power that will prevent this. The problem is thinking of the playing field as a sort of board game. You play monopoly and you accept the outcome as 'fair'. The problem of course is that in life, unlike monopoly, you don't fold up the board after the game is over and begin it all again - in other words, the economy isn't a series of discrete games that are iterated at zero.
Thus, the whole "equality of opportunity" ideology has never made sense. If it succeeds, it will dissolve itself as those who succeed most make sure that we do not go back to zero, and that our idolized 'competition' is limited to those in the lower ranks - for among the wealthiest or the most powerful, the competition is, precisely, to stifle and obstruct competition in as much as it injures wealth or power.
To not understand the latter fact is to understand nothing about the incentive for acquiring wealth or power. It is as if economists truly believe that billionaires are searching for the next billion to spend it on candy, instead of seeing them as political players building a very traditional structure of status that will allow them the greatest possible scope for exercizing power, including helping their allies and family and injuring their enemies.”

I am not satisfied that I have spelled out the structural dilemma here. In trying to build an economy with a non-interfering state that only guarantees that the ‘playing field’ is levied, you are building, in reality, a massively interfering state. There is no point at which equality of opportunity will, as it wear, work by itself. This is because the economy does not exist as a chain of discrete states – rather, what happens in time t influences what happens in time t1. The board game metaphor, however, exerts an uncanny influence over thought here. From Rousseau to Rawls, the idea of an original position has, unconsciously, created the idea that society is like a board game. That is, it has beginnings and ends; a whole and continuous game came be played on it; that game will reward people according to their contributions. And so on. Here, classical liberalism still has a grasp on the liberalism that broke with it to develop the social welfare state. Both liberalisms, for instance, can accept that the price of an apple is not ‘earned’ by the apple, but both bridle at thinking the price of a man – his compensation – is not ‘earned’ by the man. It must have some deeper moral implication.
As we have discovered, the liberal hope, in the sixties, that the social welfare system would so arrange the board game of society that equal opportunity is extended to all, and so dissolve – was based on the false premise that the players all recognize a sort of rule in which they would not use their success in making moves to change the rules of the game. But this is to fundamentally misunderstand the incentive in this ‘board game’ – success consists precisely in changing the rules in your favor. It does not consist in getting rewarded for one’s contribution to the aggregate welfare of the players of the game. The billionaire is of a different kind than the saint. And each, to use Spinoza’s phrase, must continue in their being in order to be at all.
The anti-liberalism of the last thirty or forty years is rooted in this liberal blindspot. On the one hand, the liberal allows his rhetoric to be taken hostage by a pro-forma anti-statism – surely we don’t want the corrupt state to reward the lazy and unscrupulous! Thus, social welfare is presented with a wholly utilitarian justification – it exists solely to help the industrious and the respectable. So the liberal concedes that the protector state is a second best arrangement – and slides easily into bemoaning middle class ‘entitlements’, as if surely the middle class should stand on its own. On the other hand, the state engineered by the liberals does keep growing – it keeps growing because the middle class desperately needs it to maintain their life styles, and it keeps growing because the wealthy use it as a reliable annex to acquire various monopoly powers and as a cheap insurance plan.

What the liberal seemingly can’t acknowledge is that a democratic republic, can only afford the ‘board game’ of private enterprise if the state uses its powers not simply to redistribute or to produce, but to limit – that is, to hedge in and countervail the vested influence of the wealthiest. Thus, the democratic state taxes not only to provide income to the state, or to redistribute money to the less ‘worthy’ – it also does so to materially weaken the wealthiest. Otherwise, the wealthiest will rather quickly take over the state and make a mockery of democracy.
Taxation is the guillotine by other means. Joseph de Maistre once wrote that the compact between god and the state is sealed by the blood shed by the hangman. Wrong about god, de Maistre was certainly right that all social contracts are sealed in blood. No democracy can survive if it forgets this fact.